Government Shutdown Theater November 25, 2013

All Americans should be offended by the political theatre during the first part of October, called “The Government Shutdown”. In reality both sides were pulling the puppet strings to create a show for the voting public, who chose sides along party lines and simply pointed their fingers at each other’s team as the offending party. Instead of actually cutting spending during the Shutdown, the government spent MORE money. The National Park Service actually hired more staff in order to block the view of Mount Rushmore, shut down memorials that normally do not require any staff, and barricaded public parking lots. One side blamed President Obama, the other side blamed Congress. All of the “furloughed” employees actually got paid while not working, so the shutdown ended up being a paid vacation for the federal employees who were deemed non-essential for a couple of weeks. Only a few faint voices were heard asking the question “do we really need this many Federal employees and contractors in the first place?” A few months ago we explored the data within South Carolina and discovered 1 in 5 adults in our labor force were working for the local, state, and federal government (excluding both military and farm workers). In the end, despite all the theatrics, a so-called Clean Resolution was passed to extend the debt ceiling debate to January 15, 2014, the budget was not balanced, and typical pork was added into the Clean Resolution at the last minute receiving no debate whatsoever.

In reality, there was no new debt ceiling crisis in October at all. It was entirely manufactured by politicians and the myth was spread by the mainstream media. If you can place any faith in the numbers reported by the government at all, then The Treasury Department reports that the total debt owed by the nation miraculously, nay, unbelievably, remained precisely $25 million below the purported debt ceiling for 6 months before the purported imminent breach of debt ceiling in October. This is a number that would naturally vary, at least a few pennies, in any normal accounting environment – the country had bonds that matured and new bonds that were issued. The country spent money during that 6 months and also received tax revenues. It is very simply mathematically impossible that the total deficit remained unchanged for 6 months.

Both parties should be upset with where our government has gone over the last several decades as the publicly held Treasury debt exploded from less than $1 trillion dollars prior to 1981 to over $17 trillion today. For 205 years our total publicly held debt, not including entitlements, was substantially below $1 trillion dollars, and just 32 years later it has ballooned to $17 trillion. If you add in State and Local debt and entitlements that are due over just our lifetimes (i.e. Medicare, prescription drug benefits, and social security) the total debt is about $143 trillion (source: US Debt Clock, Federal Reserve). To put it very bluntly, if we sold all the assets in this country owned by individuals, companies, and non-profits (every house, car, company stock, retail mall, luxury yacht, every piece of jewelry in our safe deposit boxes, and all of the land), we would still owe about $38 trillion. If you compare it to a typical South Carolina household, it would be as if they owed $3.2 million dollars. That household can obviously not hope to repay their debts, even if they had no other living expenses and gave 100% of their income to debt service every year, it would take over 150 years to pay that balance down even if interest rates remained at 1%. Once you pull back the magic curtain and just look at the numbers, this house of cards is unstable. A solution that cuts expenses by a few hundred billion dollars a year “amounts to bailing out the Pacific Ocean with a teaspoon”, to quote Chris Cox in a Wall Street Journal article from late last year.

Spending at the Federal level has exceeded inflation by 63% – this has occurred under both our current Democrat President and our most recent Republican President, and it’s also happened under the watch of both a Republican and a Democrat controlled Congress. The explosion in Federal spending in recent years has been a bipartisan effort.

While we may never fully understand the true reasons behind the October Debt Ceiling Theater, it is abundantly clear that it will be used as a tool by both parties in the 2014 made-for-tv election cycle. The buck stops at us as voters. Until we start electing qualified individuals to offices to represent us, we should expect nothing more than the farcical theater that has become what our political process is today. I would like to personally invite you to join us the third Monday of the month at our monthly social get together with the location to be announced on our web page. While you’re at the website, I encourage you take the World’s Smallest Political Quiz and see where you fall within the spectrum of liberal, conservative, big government, or libertarian.